EMPLOYMENT APPEALS TRIBUNAL
CLAIM OF: CASE NO.
EMPLOYEE - claimant UD2258/2011, RP2867/2011
MN2307/2011,WT921/2011
Against
EMPLOYER - respondent
Under
UNFAIR DISMISSALS ACTS, 1977 TO 2007
REDUNDANCY PAYMENTS ACTS, 1967 TO 2007
MINIMUM NOTICE AND TERMS OF EMPLOYMENT ACTS, 1973 TO 2005
ORGANISATION OF WORKING TIME ACT, 1997
I certify that the Tribunal
(Division of Tribunal)
Chairman: Mr R. Maguire, B.L.
Members: Mr R. Prole
Mr F. Keoghan
heard this claim at Dublin on 4th April and 4th November 2013
Representation:
Claimant: Ms Grainne Gilmore BL instructed by
Daniel Spring & Co, Solicitors, 50 Fitzwilliam Square, Dublin 2
Respondent: Mr Conor Hannaway,SHRC Limited
Heather House, Heather Road, Sandyford Business Park, Dublin 18
The determination of the Tribunal was as follows:
The appeals under the Redundancy Payments Acts, 1967 to 2007, Minimum Notice and Terms of Employment Acts, 1973 to 2005, and the claim under Organisation of Working Time Act, 1997 were withdrawn at the outset of this hearing.
Respondent’s Case:
The Managing Director gave evidence. The respondent company manufactures and sells clothes and other products in its nationwide stores and has approximately 340 employees. The claimant was hired as Retail HR Manager in 2000. She was promoted to HR Manager in 2003. There was a HR administrator working in the office for a time, but when that person left there was only the claimant in the HR Department. The claimant reported to the Finance and Operations Manager from 2006 until his departure in 2009. She then reported directly to the Managing Director. A Group Finance Officer was appointed to make savings in the company. The Managing Director recruited her without the involvement of the claimant. She cut €1million off pay and overheads. The claimant took time off to train as a primary school teacher beginning in 2009. In June 2010 she went on maternity leave. An interim HR manager was appointed but this person left in October 2010 for personal reasons. The Group Finance Officer took over the HR duties. The claimant took extended maternity leave and returned to work in May 2011. The Group Finance Officer handed back the HR functions.
There was pressure on the business due to the downturn in the economy. There was a review of all departments. There was a general pay freeze. All departments were reviewed to find savings. The Managing Director waited until the claimant returned to begin reviewing the HR department. He decided that the Group HR Manager position should be made redundant. There were no alternative positions and so the claimant was dismissed. The dismissal had nothing to do with her maternity leave. The company is largely staffed by women. The Managing Director asked the claimant to look at costs for a shorter working week. The claimant’s position was that the HR Manager’s role was fulltime. The Managing Director looked at what his competitors were doing. They had all removed the HR Manager role. His brother, who runs a sister company, turned down the suggestion of sharing HR services. The claimant’s salary was €60k plus a company car.
The claimant appealed to a non-executive director but was unsuccessful. The HR Manager position has not been replaced. The Managing Director gave evidence that there were no performance issues with the claimant. He disputed that he had any difficulties with her. The HR area was very quiet as people were happy to have jobs and there were no wage increases. The Group Finance Manager found the HR area very quiet while she was covering the claimant’s duties.
There were a lot of redundancies made. Redundancies at management level included a gift shop manager in Ennis, the Buying Director’s secretary, a warehouse manager and shop managers in Limerick, Kilkenny and Cork. The company has two Operations Managers who visit the shops and ensure that all housekeeping is done. The ideal is 15 shops per Operations Manager. The company had 22 shops at the time and so appointed a second Operations Manager during this time. They expanded the number of shops to 28 plus an online shop. This employee did not have HR responsibilities. The Group Finance Manager takes care of recruitment. Shop managers take care of rosters. The Payroll officer does the wages.
Three documents summarised the review of the HR department. One document was an analysis of the time the HR office had been closed over the previous two years due to the claimant’s unpaid leave to study and her maternity leave. It concluded that the office had been closed 107 weeks or 36.45% of the previous two years. The Managing Director stated that it was one of many factors considered when deciding to close the HR department. He denied that the decision to dismiss was made in advance. The 36.45% figure was pointed out in a letter to the officer who heard the appeal.
The Managing Director holds weekly meetings with senior management. Normally this would have consisted of the two buyers, two operations managers, Finance Manager, Marketing manager and the HR Manager. There was little activity reported on the HR side. The claimant was the only senior manager made redundant.
In February 2009 the respondent recruited a Group Finance Officer. That controller told the Tribunal that at that time and subsequently the respondent was operating in a very difficult environment. A full root and branch review of all its operations was needed with a view to cut costs and implement savings. That exercise lead to some redundancies, pay cuts, and rent reductions. That review also extended to the company’s human resource activities. The review showed that its competitors and comparators operated without a stand-alone dedicated human resource section. Notwithstanding the claimant’s recommendation that her department should be retained both she and the Managing Director concluded otherwise. Human resource functions were to be distributed among other staff and sectors and in some cases outsourced to other bodies.
The absence of the claimant for various reasons but especially her maternity leave was not a factor in making her job redundant. While the claimant was unavailable her position was either replaced or carried out by a number of other staff including the witness. She was surprised to hear of reported disputes aired by the claimant and added that she had a good working relationship with her. During the claimant’s absence the respondent did not conclude it could function without her services and her job was not in jeopardy when she returned in May 2011 following her extended maternity leave.
At the time of the claimant’s redundancy in June 2011 the respondent did not have a suitable alternative position to offer the claimant.
Claimant’s Case
The claimant commenced employment with the respondent company as a Human Resource Officer in the spring of 2000. Less than four years later she acquired the position of Human Resource Manager and had 23 stores and over 300 staff “under her wing”. Her roles and functions in that role were wide ranging particularly in the personnel section. When she took maternity leave in 2005 the claimant was actively involved in the recruitment of her replacement. At that time she reported directly to the Chief Operations and Finance Officer. That person left the respondent in early 2009 and the claimant then reported to the Managing Director of this private unlimited company. A new Group Financial Officer joined the company around that time.
By the late 2000s and into the new decade the respondent was feeling the effects of a recession in the retail trade. Turnover, sales and margins were down and in recognising these changes the claimant while wishing to remain in her human resource position also opted to better safeguard her future in the region where she resided. In the same year the respondent granted her leave of absence to pursue an outside unrelated degree course. During that absence the Group Finance Officer undertook her roles and functions.
The claimant regained her position when she returned in May 2009 from her studies. Thirteen months later the claimant began a second maternity leave period and while her post was replaced she had no involvement in that process. Her good working relationship with the Managing Director was deteriorating at this time and this showed itself in the way she was treated in dealing with contracting her replacement and the handing over of her position. She also differed with that manager over the extent of the proposed wage cuts for certain members of staff.
Prior to returning to work in May 2011 following extended leave the claimant received two letters from the respondent related to ongoing and proposed reviews of all aspects of the business, including human resources. She met the Managing Director and the Group Finance Officer on 16 May which was her first day back to work. At that meeting she was tasked with producing ways to improve efficiencies and securing significant cost savings for her department. No explicit reference was made to redundancies at that meeting.
A week later the claimant presented certain proposals related to her department. She also received a letter from the Managing Director that day which detailed possible savings under a number of headings. Among that list was the suggestion to close the human resource department and subsume it into other sections. A further meeting on this cost cutting issues took place two days later. A proposal to reduce the Human Resource Manager’s role to a shorter working week was aired and the claimant was asked to stress test that option. She neither offered nor was invited to consider a shorter working week option. In early June the claimant told the Managing Director that she could not recommend the closure of the human resource department and its functions being dispersed to other departments.
The claimant was informed by the Managing Director on 13 June 2011 that the position of the Human Resource Manager was to be made redundant and consequently her employment with the respondent was to cease. Her appeal to a non-executive manager against that decision proved fruitless.
Determination
The Tribunal heard submissions from both parties.
The respondent submitted that the claimant was considered redundant under Section 6(4)(c) of the Unfair Dismissals Act, 1977, as amended, in that it was done on the grounds of the redundancy of the employee. This was stated to be on the basis of section 7(2)(e) of the Redundancy Payments Act 1967 as amended by Section 4 of the Redundancy Payments Act, 1971, in that it was done based on ‘the fact that the employer had decided that the work for which the employee had been employed (or had been doing before her dismissal) should thenceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.’
The respondent admitted that no formal assessment of the qualifications or training of the claimant was undertaken; in fact no evidence was adduced to show that any such assessment on any level took place. It seems that it was assumed that while other employees could do the work that the claimant was employed for, she could not do the work that they were already doing.
However, the claimant submitted that the Tribunal did not even need to consider this potential failure of the respondent in relation to the Redundancy Payments Act, as the respondent should be deemed to be an unfair dismissal pursuant to Section 6(2)(g) of the Unfair Dismissals Act 1977, as it resulted ‘wholly or mainly’ from ‘the exercise or proposed exercise by the employee of a right under the Maternity Protection Act 1994 to any form of protective leave or natal care absence, within the meaning of Part IV of that Act…’
It was submitted that the Tribunal should adopt a position that protected the claimant from being dismissed due to the undoubted indirect consequence of her taking her maternity leave: i.e. the respondent was able to discover that it could get other employees to do the work of the claimant while she was on maternity leave, and this resulted in the termination of the employment of the claimant.. It was submitted that if employers were permitted to act in this way, it would inevitably have a chilling effect on maternity rights: workers would refrain from taking their protective leave because for fear that their employer would be forced to re-order the workings of its business without the employee, and they would have no job to return to.
While this argument has strength, the Tribunal does not find on the evidence before it that it needs to make a determination on it.
In the case at hand, the respondent has failed to justify the dismissal of the claimant as required.
The Tribunal is convinced that a consideration of the employment of the claimant was undertaken in advance of her return to work from her maternity and annual leave. The evidence of the truncated time period allowed for the claimant’s review of the function of her department; of the fact that her review was not permitted to encompass pay and hours of staff which were the most significant costs associated with the Human Resources function; of the fact that she was tasked with travelling overnight twice in the week within which she was to prepare this review; of the fact that the handover of her functions from those who had covered her leave took only a week after the review was presented on 23 May 2011, leads to the inescapable conclusion that the respondent had determined that it was going to make the role of the Human Resources Manager redundant in advance of her return to work.
In subsequent discussions and correspondence, the claimant was asked repeatedly whether she would temper her recommendation for the necessity for a dedicated Human Resources Manager in light of the fact that the respondent was strongly considering abolishing the role, or having it done on a part-time basis. The respondent submitted that this indication should have been taken by the claimant as an offer of part-time work, and that when she stood by her recommendations in relation to the retention of the function and was made redundant, the respondent had therefore explored retaining her on another basis.
The Tribunal does not agree with this assertion. The claimant was asked in her managerial role to consider the necessity of the dedicated Human Resources function. That is not the same as an employee being told that a decision has been made in relation to their individual employment and their being asked to consider working part-time.
The Tribunal is satisfied that there was a redundancy situation. While it is not disputed that there were great economic pressures on the respondent during this time, that does not obviate the need for a fair and transparent process leading to redundancy.
It must be inferred that the respondent had concluded that it did not need a dedicated Human Resources function in advance of the claimant’s return from work. The respondent did not offer the claimant any alternatives to her job, and did not give evidence of considering any such alternatives.
In addition, the respondent made the decision to terminate the employment of the claimant as if this was the only logical consequence of making the role of Human Resources Manager redundant. During the course of the hearing, the claimant gave evidence of having operated Sage software in previous employment which came as news to the respondent. It is clear that there had been no evaluation of the respective qualification and training of employees before deciding that the claimant was to be terminated. This is unfortunate and does not seem to be a considered approach of the respondent – evidence was given of internal relocation of a payroll assistant to another section of the business previously, exemplifying a flexibility that was notably absent in the claimant’s case.
In all of the particular circumstances of the case, the Tribunal finds that the termination of the claimant’s employment by the respondent was therefore unfair, in general because of the approach adopted and the failure of genuine engagement with the position of the claimant, and in particular because the respondent failed to bring itself within Section 7(2)(e) of the Redundancy Payments Act, 1967 on which it relies.
The Tribunal awards the claimant €43,000 under the Unfair Dismissals Acts, 1977 to 2007, less any redundancy payments already received by the Claimant.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)